As the next phase for the restaurant industry becomes clearer, how will distributors and restaurants prepare for what could be a very difficult fall and winter? They’re faced with most schools opening virtually and not providing dining programs, as well as the uncertainty of when students will return. Also, an expanding list of travel bans poses another challenge for the hospitality industry to reopen.
Last but not least, as the weather turns cold across the northern half of the country, outdoor dining will be closing and indoor dining capacity is expected to remain restricted.
As the pandemic rages on, in major cities across the north like New York City, outdoor dining runs through Oct. 31. Due to social distancing and reduced indoor capacity, many restaurants will not be able to generate enough foot traffic to cover expenses. In many places this could mean four to five months of additional financial pressure on an already strained restaurant industry.
Distributors and restaurants will need to innovate in order to survive this winter. As someone with over 30 years of retail experience, my thoughts are how can distributors and restaurants learn from retail trends to expand their businesses? Let’s review what’s happening across today’s retail marketplace.
Grocery shopping frequency is down 20% as consumers visit grocers less and stock up more during each trip. Retail produce sales have remained strong with double-digit sales improvements year over year.
Also, online grocery has quickly moved from a specialty to mainstream marketplace, with leaders like Amazon reporting sales tripling in the second quarter of this year.
So how can restaurants capitalize on these retail trends and the explosive growth in the online marketplace? Many restaurants have already pivoted to offer expanded online pick-up and delivery programs. I see this trend continuing, with many in the industry exploring the option to adopt a ghost restaurant format. The advantage of ghost restaurants is the ability to locate a virtual restaurant where operators see fit and only deliver directly to patrons. You can have multiple ghost restaurant locations and operate them out of the same kitchen. To attract customers you can partner with food delivery apps and create easy-to-use websites.
As for distributors, they have the ability to partner with their restaurant customers as they implement innovative online approaches like ghost restaurant formats. In addition, many distributors have also decided to market their products directly to consumers. Marketing directly to consumers gives them the ability to provide high-quality produce, fresh food and meal solutions.
Fall and winter will definitely pose challenges to the foodservice industry. Now is the time to develop your plans and to launch your approach. The restaurants and distributors who have the best strategy will be the ones that are able to withstand this harsh winter.
Craig Carlson is CEO of Carlson Produce Consulting LLC. Contact him at carlsonproduceconsulting.com.